Economy Shrinking

That's the White House reaction to news that the economy shrankin the third quarter. In the strongest signal yet that the country is in recession, the Commerce Department report says the gross domestic product contracted at a 0.3 percent annual rate from July through September.

A big cut in consumer spending was a major factor. Consumersreduced spending at a 3.1 percent pace, the biggest cut since 1980.But the White House is downplaying the significance of the numbers. It says they were not unexpected and notes special circumstances, such as hurricanes and the strike at Boeing. Press secretary Dana Perino says while the country faces "serious challenges," it "remains the best place to do business."

Reaction in the stock market has also been positive. Traders had expected the news to be worse. The Dow was up as much as 225 points in the first hour. It's sunk back a bit since, but remains in positive territory.

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